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Bangkok hotel’s face struggle to achieve tourism growth

Bangkok hotel’s face struggle to achieve tourism growth

Andrew Wood
It’s been a difficult few months with most hotels in Bangkok reporting downturns in business, with some reporting 14% drop in revenues from the previous year.
There are many factors at play, however price does not appear to be a major influencer.
Top of the list is security concerns particularly in the capital. The New Year bombings; the continued unrest in the South; the recent grenade attack close to the Rama Gardens hotel and a spate of travel advisories with government warnings are all hurting tourism.

Andrew Wood
Forecast for March ‘07 in the capital is more of the same with occupancies normally hovering above 80%, however forecasters predict little more than 70%.
Big losers are the corporate and MICE market sectors. Some companies have issued bans on all but essential travel to Thailand, with the uncertainty over the interim government’s failure to curb ongoing security concerns.
A number of high profile events have recently cancelled; one 5 star hotel recently reported loosing a North American corporate incentive group worth Bt 11m (US$ 309k), due to current travel advisories.
The financial corporate market is still reeling from the effects of a number of unclear government fiscal regulations and a series of political U-turns. Add to this a weakening dollar and the short term looks decidedly unsettled.
The downturn appears not to be limited to the hotel sector. Luxury car maker Daimler Chrysler reported recent slower sales as potential customers took a wait and see approach. Krungthai Card (KTC), with its 1.4 million credit card holders, recently reported a 43% drop in YOY profits.
TAT and THAI are shortly to announce major campaigns at boosting domestic spending with promotions aimed at families during the long school holidays and also Songkran, the latter leading to a mass exodus from the metropolis, during the April bank holiday.
With the low season just round the corner many hoteliers are expecting more challenges ahead as the industry looks for direction and revenue opportunities.